Stronger demand for automobiles bolstered U.S.
manufacturing, which grew in April at the fastest pace in almost
a year, according to Institute for Supply Management. The
group’s factory index climbed to 54.8 last month, the best
reading since June. Chrysler, Ford and Hyundai Motor Co. (005380) said
this week they will add shifts at factories this year.

“We’ve got ourselves steady, sustainable growth in the
market,” said Alan Baum, principal of auto-industry forecaster
Baum & Associates in West Bloomfield, Michigan. “The auto
industry is going through a little bit different cycle that is
obviously helping the overall economy.”

Total light-vehicle sales in April gained 2.3 percent to
1.18 million, according to Woodcliff Lake, New Jersey-based
researcher Autodata Corp. The industry’s seasonally adjusted
annual rate, or SAAR (SAARTOTL), was 14.4 million. The pace topped the 14.3
million estimate that was the average of 15 analysts surveyed by
Bloomberg.

Adjusted for “selling days,” which exclude Sundays and
holidays, Ford’s sales rose 6.8 percent and GM’s gained 3.2
percent. Some analyst exclude non-selling days to compare year-over-year results because many dealerships are closed.

April 2012 had three fewer selling days than the year-earlier month. April 2012 was just the second month in the last
10 years that such a wide disparity occurred, Jim Cain, a GM
spokesman, wrote in an e-mail.

Chrysler, which builds more than half of its vehicles in
the U.S., boosted worldwide shipments by 25 percent in the first
quarter, the automaker said last week. The company is
accelerating the addition of 1,100 jobs and a third crew of
workers at a Detroit plant by adding them in November, rather
than waiting until early 2013, Chief Executive Officer Sergio Marchionne said yesterday.

Dodge Dart

Deliveries of Chrysler’s 300 sedan more than doubled in
April to 7,763, the Auburn Hills, Michigan-based company said
today in a statement. Marchionne is counting on the new Dodge
Dart compact, which begins production this week, to sustain
Chrysler’s momentum later this year after 11 straight months of
sales gains topping 20 percent.

“We continue to underestimate the power of Sergio,”
Rebecca Lindland, an analyst with IHS Automotive, said today in
a telephone interview. “They have the product to keep going,”
she said, citing the upcoming Dart and increased production of
Jeep Grand Cherokee and Dodge Durango sport-utility vehicles.

Chrysler’s U.S. market share rose 2 percentage points to
11.6 percent through April, according to Autodata.

GM, the world’s top seller of cars and trucks, raised its
forecast for full-year U.S light-vehicle sales to 14 million to
14.5 million, up from as much as 14 million. The company cited
better-than-expected industry results in the first quarter and
its expectation for sustained economic growth.

Continuing Trend

“Demand for automobiles is helping propel production,”
Jack Ablin, chief investment officer of Harris Private Bank in
Chicago, which oversees about $60 billion, wrote in an e-mail.
“We expect this trend to continue even in the face of
moderating economic winds abroad.”

GM, the top-selling automaker in the U.S., is introducing
new models such as the Chevrolet Spark small car later this year
to boost U.S. market share that fell by 1.9 percentage points in
the first four months to 17.7 percent.

Ford, the No. 2 U.S. seller, said deliveries of its Fiesta
subcompact plunged 44 percent to 5,135. The Dearborn, Michigan-based company sold 37 percent of its vehicles to fleet customers
last month, Erich Merkle, the automaker’s sales analyst, said on
a conference call.

Ford has said it can’t keep up with demand and sees its
U.S. market share dropping this year as a result. Factory
production will increase by 400,000 vehicles on an annualized
basis for the remainder of the year, which should slow Ford’s
share loss, Ken Czubay, the automaker’s U.S. sales chief, said
today on the call.

‘Caught Up’

“We’ll be caught up on share as the production comes on
line,” Czubay said. Ford’s U.S. market share slid to 15.4
percent through April from 16.2 percent a year ago, Autodata
said.

GM rose 1.3 percent to $23.31 at the close in New York
while Ford slid 0.4 percent to $11.23. The benchmark Standard &
Poor’s 500 index climbed 0.6 percent and erased an earlier
decline after Tempe, Arizona-based ISM released its index.

Affiliates Hyundai and Kia Motors Corp. (000270), both based in
Seoul, combined to sell 0.9 percent more vehicles than a year
earlier, topping six analysts’ average estimate for a 0.4
percent drop. Hyundai will add a third shift at its main
assembly plant in Montgomery, Alabama, to meet U.S. demand for
its Sonata sedans and Elantra compacts, the company said
yesterday in a statement.

Deliveries of the Kia Optima sedan surged 69 percent to
11,021, according to a statement. Sales of Hyundai’s Accent
increased 40 percent to 6,160.

Honda Versus Nissan

Honda deliveries slid 2.2 percent for the second
consecutive monthly drop. That was better than the average
estimate of eight analysts for a 6.7 percent decline. The Tokyo-based carmaker regained its spot as the fifth-largest automaker
by U.S. sales from Nissan after deliveries of the mid-size
Accord rose 26 percent to 35,385, according to a statement.

Nissan Motor Co. (7201) deliveries slipped 0.3 percent, missing
eight analysts’ average estimate for a 19 percent gain. Sales of
the automaker’s top-selling Altima sedan, a redesigned version
of which arrives at dealerships in July, slipped 5.8 percent to
16,239, the company said in a statement.

Toyota’s market share through April increased to 14.3
percent through April from 14.1 percent. Honda’s declined to 9.5
percent from 10.3 percent. Nissan’s was unchanged at 8.5
percent. Hyundai and Kia held a combined 8.9 percent of the U.S.
market through April, up from 8.4 percent, according to
Autodata.

Volkswagen AG (VOW), which is on pace to exceed its target for
more than 500,000 U.S. sales this year, increased combined sales
of its Volkswagen and Audi brand vehicles by 27 percent in
April, exceeding four analysts’ average estimate for a 9.2
percent gain. The company’s market share rose through April to
3.7 percent from 3.1 percent a year earlier.